New Zealand Fire Service Commission v Manukau City Council [2005] NZCA 282; [2006] NZRMA 123 (21 November 2005)

Last Updated: 19 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA176/04

BETWEEN NEW ZEALAND FIRE SERVICE COMMISSION
Appellant

AND MANUKAU CITY COUNCIL
Respondent

Hearing: 16 August 2005

Court: William Young, O'Regan and Gendall JJ

Counsel: J A Knight and P M McRae for Appellant
M C Frogley for Respondent

Judgment: 21 November 2005

JUDGMENT OF THE COURT

A The appeal is allowed.

2. The Commission is awarded costs of $6,000 plus usual disbursements in this Court.

100. The Commission is also entitled to costs in the High Court on a 2B basis, and disbursements as agreed or, in the event that agreement cannot be reached, as determined by the Registrar of the High Court at Auckland.
     

REASONS

(Given by O’Regan J)

Introduction

[1] The New Zealand Fire Service Commission is the owner of land in Papatoetoe which was formerly used for a fire station but is now surplus to the Commission’s requirements. It wishes to sell the land. In issue in this appeal is whether s 40 of the Public Works Act 1981 (1981 Act) applies to this land, and, if so, to whom the land must be offered back. The Manukau City Council (as successor to the Papatoetoe Borough Council) claims that the s 40 does apply and requires that the land be offered to it.
[2] In a judgment delivered on 22 July 2004, Robertson J ruled that s 40 applied to the disposal of the land by the Commission but that the successors of the last private owners, Frank Colebrook Western and Elizabeth Flora Western (“the Westerns”), were entitled to the benefit of the offer-back provisions under the Act rather than the City Council. He made no order as to costs.
[3] The Commission appeals against the finding that the Act applies and against the decision of Robertson J to make no order as to costs. The City Council cross-appeals against the decision that the offer-back by the Commission should be to the Westerns’ successors rather than the City Council. We were told that the Westerns’ successors had decided not to take any active part in the appeal.

Background

[4] The land to which this case is situated at the corner of Mahon Place and St George Street in Papatoetoe, Auckland.
[5] The story starts in 1951. At that time the land was owned by the Westerns.
[6] Section 22 of the Fire Services Act 1949 provided:

1. There shall be an Urban Fire Authority for every ... urban fire district ... ..

...

2. The Authority for every urban fire district mentioned in the Third Schedule to this Act, and for every urban fire district constituted after the passing of this Act, and for every urban fire district mentioned in the Second Schedule to this Act ... shall be the contributory local authority:

Provided that ... all powers, functions, and duties of any such local authority in its capacity as Urban Fire Authority shall be exercised exclusively by a committee of the local authority to be known as the Fire Committee.

...

[7] The district of the Papatoetoe Borough was an urban fire district and thus the urban fire authority for that district was the Borough Council, which, as required by the 1949 Act, had a Fire Committee.
[8] On 26 November 1951, the Fire Committee recommend to the Borough Council that the Westerns’ land be purchased for “the new fire station site”. This recommendation was accepted and negotiations to acquire the land commenced. The upshot was an agreement dated 28 April 1953, by which the Borough Council purchased the land from the Westerns. The Memorandum of Transfer stated that the transferee of the land was “the Mayor, councillors and citizens of the Borough of Papatoetoe”.
[9] After a delay that is not explained in either the High Court judgment or by the documents on the record, the Borough Council became the registered owner of the land on 3 September 1959. That year it constructed a fire station on the land. The acquisition of the land and erection of the fire station were funded by money which was borrowed by the Borough Council.
[10] Not all the land so acquired was required for the purposes of the fire station. There was a subdivision and the surplus land was disposed of. The land which was retained was then the subject of what purports to be a sale from the Borough Council to the Urban Fire Authority for a consideration of £1,600. The City Council described this transaction as a transfer from the Borough Council to itself, in its capacity as the Urban Fire Authority. On the other hand, the Commission characterised it as “a notional sale between [the Borough Council] and the [Urban Fire Authority] which does not “demonstrate the existence of two separate entities”. Robertson J described it as follows at [11] of his judgment:

The original land purchased from the Westerns was subdivided and the Fire Station land, which was part of it, was registered in the name of the Mayor, Councillors and Citizens of the Borough of Papatoetoe for the purposes of the Fire Service Act 1949.

[11] On 20 October 1976 the land was vested in the Commission by operation of s 5(1) of the Fire Service Act 1975 which provided:

(1) All real and personal property that, immediately before the date of the commencement of this Act, was vested in –

(a) The Fire Service Commission; or

(b) Any Fire Board; or

(c) Any territorial authority in its capacity as an Urban Fire Authority, –

shall, on that date, without conveyance, transfer, or assignment, vest in the New Zealand Fire Service Commission for the estate or interest of the Fire Service Commission, Fire Board, or territorial authority, as the case may be, in that property, subject to all liabilities, charges, obligations, and trusts affecting that property.

[12] The land is no longer required for the purposes of a fire station and the Commission has decided to sell the land.
[13] In January 2004, the City Council lodged a caveat on the basis that the land was held on trust. The Commission responded by filing an application that the caveat lapse. The City Council then filed an application that the caveat not lapse. The hearing of that application was, however, adjourned by consent in favour of the current proceeding which alleged causes of action against the Commission relying, first, upon the existence of a resulting trust and, secondly, that the Commission was obliged to offer back the land to the City Council under s 40 of the 1981 Act. At the High Court hearing the City Council did not pursue the resulting trust point and relied only upon the s 40 argument.

The Fire Service Commission

[14] The Commission is constituted under s 4 of the Fire Service Act.
[15] The functions of the Commission are set out as follows under s 14 of the Fire Service Act:

14 Functions of Commission

The Commission has the following functions under this Act:

(a) the functions and activities expressed in this Act to be functions and activities of the Commission, including in its role as National Rural Fire Authority:

(b) general control, within the framework of this Act, of the Fire Service and the functions and activities of the Fire Service:

(c) efficient administration of this Act:

(d) any other functions conferred on it by the Minister in accordance with section 112 of the Crown Entities Act 2004.

Section 40 of the 1981 Act

[16] Section 40 of the 1981 Act provides:

40 Disposal to former owner of land not required for public work

(1) Where any land held under this or any other Act or in any other manner for any public work—

(a) Is no longer required for that public work; and

(b) Is not required for any other public work; and

(c) Is not required for any exchange under section 105 of this Act—

the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, as the case may be, shall endeavour to sell the land in accordance with subsection (2) of this section, if that subsection is applicable to that land.

(2) Except as provided in subsection (4) of this section, the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, unless—

(a) He or it considers that it would be impracticable, unreasonable, or unfair to do so; or

(b) There has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held—

shall offer to sell the land by private contract to the person from whom it was acquired or to the successor of that person—

(c) At the current market value of the land as determined by a valuation carried out by a registered valuer; or

(d) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority considers it reasonable to do so, at any lesser price.

(2A) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority and the offeree are unable to agree on a price following an offer made under subsection (2) of this section, the parties may agree that the price be determined by the Land Valuation Tribunal.

(3) Subsection (2) of this section shall not apply to land acquired after the 31st day of January 1982 and before the date of commencement of the Public Works Amendment Act (No 2) 1987 for a public work that was not an essential work.

(4) Where the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority believes on reasonable grounds that, because of the size, shape, or situation of the land he or it could not expect to sell the land to any person who did not own land adjacent to the land to be sold, the land may be sold to an owner of adjacent land at a price negotiated between the parties.

(5) For the purposes of this section, the term “successor”, in relation to any person, means the person who would have been entitled to the land under the will or intestacy of that person had he owned the land at the date of his death; and, in any case where part of a person's land was acquired or taken, includes the successor in title of that person.

The issues in the case

[17] The issue raised by the appeal is whether s 40 of the 1981 Act applies to the disposal of the land by the Commission. If the answer to that question is “yes”, then the cross-appeal issue arises: should the Commission offer the land back to the City Council or to the Westerns’ successors?

The appeal: Does s 40 of the 1981 Act apply to the disposal of land by the Commission?

[18] This issue turns on the whether the language of s 40 is apt to describe the current situation and in particular on two questions which, because of the drafting of the relevant provisions, have a considerable degree of overlap. They are:

(a) Whether the “land [is] held under [the 1981 Act] or any other Act or in any other manner for any public work”; and

(b) Whether it is held by a “local authority”.

[19] The relevant definitions for the key terms in s 40 are set out in s 2 of the 1981 Act:

local authority means any regional council, territorial authority, Catchment Authority or Regional Water Board, Harbour Board, Electric Power Board, Education Authority within the meaning of the Education Act 1964, Council of any University within the meaning of the Education Act 1989, Airport Authority, and any other person or body, however designated, having authority, under any Act, to undertake the construction or execution of any public work:

local work means a work constructed or intended to be constructed by or under the control of a local authority, or for the time being under the control of a local authority.

public work and work mean—

(a) Every Government work or local work that the Crown or any local authority is authorised to construct, undertake, establish, manage, operate, or maintain, and every use of land for any Government work or local work which the Crown or any local authority is authorised to construct, undertake, establish, manage, operate, or maintain by or under this or any other Act; and include anything required directly or indirectly for any such Government work or local work or use:

(b) Every Government work or local work constructed, undertaken, established, managed, operated, or maintained by any Education Authority within the meaning of the Education Act 1964 and every use of land for any Government work or local work which such Education Authority constructs, undertakes, establishes, manages, operates, or maintains, and include anything required directly or indirectly for any such Government work or local work or use:

(c) Any Government work or local work that is, or is required, for any university within the meaning of the Education Act 1989.

[20] Under s 4(7) of the Fire Service Act 1975:

The New Zealand Fire Service Commission shall be deemed to be a local authority for the purposes of Part 2 of the Public Works Act 1981 ...

[21] Section 40 is in Part 3 of the 1981 Act. Part 2 of the 1981 Act provides for the acquisition of land for public works.
[22] In this Court and in the High Court, the Commission has argued that the land was not held by the Commission for the purposes of a public work because a public work, by the definition set out in s 2, must be constructed or maintained by the Crown or a local authority. The Commission says that it is neither a local authority nor part of the Crown for the purposes of the Act. Accordingly, the Commission submits that the land could not have been held for the purposes of a public work.

High Court decision

[23] This argument was dismissed in the High Court by Robertson J. He referred to the definition of local authority which is set out earlier and italicised the words which we have emphasised. He then went on:

[22] The only part of the definition of "local authority" that the Fire Service Commission could come within is the last part which has been placed in italics [the words highlighted at [19] above]. Although there is a degree of tautology in the definition (in that the Act effectively says that a local work is constructed by a local authority, and a local authority is something that constructs a local work) I am satisfied that the Commission is in fact a local authority generally for the purposes of the Public Works Act for the reasons below.

[23] Section 4(7) of the Fire Service Act 1975 reads:

“(7) The New Zealand Fire Service Commission shall be deemed to be a local authority for the purposes of Part 2 of the Public Works Act 1981, the Reserves Act 1977”

[24] Part 2 of the Public Works Act 1981 is headed “Acquisition of land for public works”. Section 16(2) of the Public Works Act 1981 provides that a local authority is:

“... empowered to acquire under this Act any land required for a local work for which it has financial responsibility”.

The Commission has the power to acquire land. As this is so, the Commission comes within the catch all provision in the definition of “local authority”. It follows from this that the fire station is a “local work” and therefore a “public work”.

[25] It could be argued that this conclusion cuts through s 4(7) of the Fire Service Act 1975. As the Commission is not a local authority, deeming it to be such for the purposes of Part 2 means it is not for other parts of the Act and so the application of the maxim expressio unius est exclusio alterius means that the Commission is not a local authority for the purposes of Part 3 (which includes the offer back provisions).

[26] However, that is a somewhat arid argument. The deeming of the Commission to be a local authority for the purposes of Part 2 cannot alter the more general position under the definition which in effect makes the Commission a local authority generally and it is therefore not appropriate to apply the maxim.

Submissions for Commission

[24] Counsel for the Commission, Mr Knight, accepted that, where the Commission has acquired land for public works under Part 2 of the 1981 Act (by virtue of ss 61 and 4(7) of the Fire Service Act), it will hold the land so acquired as a public work because of its deemed “local authority” status under s 4(7). Since the land had been acquired with that status, the Commission would be bound by s 40 of the 1981 Act if it no longer required the land for such purpose.
[25] Of course, that would have no effect on the present case because the land in this case was vested in the Commission by the Fire Service Act when the Commission came into being. Mr Knight said that any land acquired by the Commission other than pursuant to ss 61 and 4(7) of the Fire Service Act was not subject to s 40 because the Commission was not a “local authority” as defined.
[26] Mr Knight said that the Commission did not come within the generic words at the end of the definition (highlighted in [19] above). He said that it was clear that the Commission was not within the nine specifically listed categories of body identified in the definition, and he argued that the generic wording at the end of the definition needed to be read ejusdem generis. He said the nine specifically listed categories of bodies are all bodies having only a local or regional jurisdiction (as the concept “local authority” would normally imply) and that all were elected representative bodies or had some elected members. In contrast to that, the Commission is a national body and its members are appointed by central government. Initially the Commission consisted of three members appointed by the Governor General on the recommendation of the Minister of Internal Affairs, and the permanent secretary of the Department of Internal Affairs ex officio. Now, it consists of five members appointed by the Minister.
[27] Accordingly, Mr Knight argued that the Commission should be found to fall outside the definition of “local authority”. He said that this interpretation was consistent with:

(a) The fact that it was deemed to be a local authority for very limited purposes under s 4(7) of the Fire Service Act, including for the purpose of Part 2 of the 1981 Act but not Part 3 of that Act (in which s 40 appears);

(b) The legislative history of the 1981 Act;

(c) The legislative treatment of other bodies in relation to s 40, which illustrates that bodies having national jurisdiction and which would otherwise be seen to be comparable with the Commission are not intended to be “local authorities” for the purposes of the 1981 Act.

[28] As to the first of those, he argued that s 4(7) deems the Commission to be a local authority for the purpose of Part 2 of the 1981 Act only. He said that this would be a nonsense if the Commission were a local authority as defined in the 1981 Act: there would be no reason to deem the Commission to be a local authority for the purposes of Part 2 of the 1981 Act if it was already within the generic definition of local authority for all purposes under the 1981 Act.
[29] As to the second matter, he said that the legislative history supported the Commission’s interpretation. He noted that when the Fire Service Act was passed, and land was vested in the Commission, no offer-back requirements existed: there was no equivalent to s 40 in the Public Works Act 1928 (the 1928 Act), which preceded the 1981 Act. He said that the Commission initially had power to acquire land compulsorily, by virtue of s 61(2) of the Fire Service Act but, when the 1981 Act was passed, the Commission lost that power. That happened because the power of compulsory acquisition in the 1981 Act was limited to “essential works” which did not include fire stations or fire protection works so the s 61(2) power could no longer be used.
[30] In response to the Commission’s concerns about the difficulties this could cause it, the Fire Service Act was amended by s 247(4) of the 1981 Act, so that it deemed the Commission to be a local authority for the purposes of Part 2 of the 1981 Act. Mr Knight said this was to allow the Commission to acquire land by negotiation under Part 2 of the 1981 Act. But it seems more likely, as counsel for the City Council, Mr Frogley, suggested, that it was intended to permit the Commission to apply to the Governor-General for a declaration that a public work was an essential work, and therefore susceptible to compulsory acquisition i.e. to give the Commission the opportunity to acquire land compulsorily if it could convince the Crown that the proposed work on the land was “essential”. Mr Knight argued that the insertion of s 247(4) into the 1981 Act would have been unnecessary if the Commission were a local authority under the 1981 Act.
[31] The “essential works” limitation was removed by the Public Works Amendment (No 2) Act 1987. This meant s 4(7) gave the Commission a general power to take land compulsorily as a deemed local authority under Part 2 of the 1981 Act. It also effectively resurrected s 61(2) of the Fire Service Act which was not amended or repealed by the 1981 Act. Section 61(2) provided that the Commission could take land in the manner provided under the 1928 Act, but the reference to the 1928 Act was changed to the 1981 Act under s 21(1) of the Acts Interpretation Act 1924. So, on its face, s 61(2) now also empowers the Commission to acquire land compulsorily under the 1981 Act. This means the Commission appears now to have two separate sources of power to take land compulsorily: s 4(7) (invoking Part 2 of the 1981 Act) and s 61(2). If it were a local authority, both would be redundant.
[32] As to the third, Mr Knight argued that the consequences of the High Court decision in this case would be that numerous Crown entities (now governed by the Crown Entities Act 2004) would also be “local authorities” for the purposes of the 1981 Act, because they, like the Commission, have “the power to acquire land” (High Court decision at [24], reproduced at [23] above). This would have the consequence of conferring powers of compulsory acquisition under the 1981 Act on bodies which were never intended to have such power, such as State-Owned Enterprises, Crown Research Institutes and other bodies which clearly have no need for compulsory acquisition powers such as the Securities Commission and Commerce Commission. He said that this obviously unintended consequence could be avoided by construing the definition of “local authority” in the manner he contends for.
[33] Mr Knight said it was obvious that Parliament did not intend national bodies such as the Commission, Crown Research Institutes (CRIs), State Owned Enterprises (SOEs) and Transit New Zealand to be treated as local authorities for the purposes of the 1981 Act. In that regard he pointed to s 40 of the State-Owned Enterprises Act 1986, which provides a specific regime for the application of the 1981 Act to land transferred to SOEs by the Crown and the equivalent provision in the Crown Research Institutes Act 1992, s 30. He also noted that s 44 of the Transit New Zealand Act confirmed that roads operated by Transit were vested in the Crown, which meant that they were Government works. There would be no need to do that if Transit were a local authority, because if roads were local works they would still be public works for the purposes of the 1981 Act and s 40 would apply to the disposal of land held by Transit for the purposes of a road.

Submissions for City Council

[34] In response, Mr Frogley disputed the appropriateness of applying the ejusdem generis maxim to the interpretation of the definition of local authority. He said that the generic wording at the end of the definition (highlighted at [19] above) should be interpreted in its plain meaning. He said that the Commission should be seen as a body with authority to undertake the execution of a public work because it had authority under the Fire Service Act to operate the fire station which had previously been established on the subject land by PUFA. He argued that, even if the ejusdem generis maxim were applied, the Commission should be seen as part of the genus because it is a public body carrying out functions for the benefit of the public generally as are the other nine categories of public bodies specified in the definition.
[35] He said this interpretation was supported by commonsense because the Commission undertook functions for the benefit of the public and that ordinary citizens would regard a fire station as a “public work”. He noted that s 40 applied to any land held by a local authority, whether or not it inherited it from a predecessor organisation: Port Gisborne v Smiler [1999] 2 NZLR 603 at [30].
[36] He also said that his interpretation was consistent with the legislative history. He said the purpose of deeming the Commission to be a local authority for the purposes of Part 2 of the 1981 Act was to empower the Commission to seek a declaration that a work was “essential” so it could take land for that work. He said it was not intended to make the Commission exempt from the operation of Part 3 or any other part of the 1981 Act.

Discussion

[37] As Robertson J noted, the definitions of “local authority” and “local work” are tautologous. In effect the Commission said it is not a local authority as defined because it does not have authority to undertake the construction or execution of any public work (i.e. local work) and that it does not have the power to construct any local work because it is not a local authority.
[38] A similar tautology arises in the definition of “local work”, which refers to the term “work” which is defined as being identical to “public work”. Thus, applying the definitions, a work is a local work that a local authority is authorised to construct etc., and a local work is a work which has been constructed etc., by a local authority. The challenge of interpretation in the present case is how to sensibly penetrate these ever decreasing definitional circles.
[39] There is real difficulty in applying the generic wording at the end of definition of “local authority” in this case, because of the tautologous drafting. Because of that, we think it is appropriate to consider the definition of local authority by reference to the normal meaning of that term (particularly the use of the term “local” which appears to exclude bodies having national jurisdiction) and to interpret the generic words in the light of the categories of specific bodies identified earlier (i.e apply the ejusdem generis maxim). We accept Mr Knight’s submission that the genus of those categories of bodies is bodies having only local or regional jurisdiction and with members who are, at least to some extent, elected. We do not accept Mr Frogley’s submission that the Commission can be considered to be part of this genus.
[40] We do not think that the fact that the Commission has power to acquire land under Part 2 of the 1981 Act brings it within the generic wording. In that respect, we disagree with the finding of Robertson J at [24] of his judgment. To be within the generic wording the Commission must have authority “to undertake the construction or execution of [a] public work”. Fire stations and fire protection works are not “public works” unless the Commission is a local authority. It is impossible to escape the circular drafting, and the case cannot be determined on that basis.
[41] That means it is necessary to look for other factors supporting one interpretation or the other. On that approach, we believe that the better view is that the Commission is not a “local authority” as defined, essentially for the reasons submitted by Mr Knight. We have given particular regard to the fact that the interpretation contended for by the City Council and adopted in the High Court would have the effect of making CRIs, SOEs and possibly other Crown Entities “local authorities” within the terms of the definition and thereby confer on them an obviously unintended right to compulsorily acquire land and obligations in relation to s 40 which are inconsistent with the specific provisions in the State-Owned Enterprises Act, Crown Research Institutes Act and the like. This was an aspect of the case which had not been emphasised in the High Court.
[42] We also think that the interpretation sits more easily with the deeming of the Commission to be a local authority for the purposes of Part 2 of the 1981 Act than the City Council’s contention, which would render s 247(4) of the 1981 Act meaningless and mean that the stated purpose for its enactment was, in fact, illusory.
[43] We accept that this places the Commission in the unusual position that land which it acquired on its establishment and land acquired by agreement under s 61(1) (until its repeal) or by virtue of s 17 of the Crown Entities Act 2004 will not be subject to s 40 if it becomes surplus, whereas land which the Commission has acquired pursuant to Part 2 of the 1981 Act by virtue of its status as a deemed local authority under s 4(7) will be. Nevertheless, that appears to us to be the inevitable consequence of the above interpretation, and would appear to be less anomalous than the alternative. It is apparent from s 40 of the State-Owned Enterprises Act and s 30 of the Crown Research Institutes Act that entities established under those Acts will have some lands to which s 40 applies and some to which it will not apply. Under the interpretation we favour, the Commission will too. In principle we see no difficulty with that as long as the different classes of land are readily identifiable. We are satisfied that they are, in the case of the Commission.
[44] We accept that this would deprive a landowner from whom land was taken compulsorily by an Urban Fire Authority prior to 1975 of a right of offer-back. But such persons had no such rights under the 1928 Act, and so could have acquired such rights under the 1981 Act only if the 1981 Act had said so. The fact that the 1981 Act expressly refrained from deeming the Commission to be a local authority for the purposes of Part 3 of the 1981 Act indicates that Parliament did not intend to confer the same offer-back rights on such persons as it conferred on persons whose land had been acquired by, and continued to be held by, the Crown or by a local authority at the time of the passing of the 1981 Act.
[45] The consequence of that is that we conclude that, in the present case, s 40 is not engaged and the Commission has no obligation to offer the land back either to the City Council or to the Westerns’ successors.

The cross-appeal: Should the Commission offer the land back to the City Council or the Westerns’ successors?

[46] Our decision in relation to the appeal makes it unnecessary to determine the cross-appeal. But in case the matter goes further, we briefly indicate our views.

The positions of the parties

[47] The City Council case runs along these lines: the Borough Council did not purchase the land for the purposes of a public work but merely for general purposes. This argument is largely premised on the view that the land was not acquired compulsorily from the Westerns and that this in turn means that it was not acquired by the Borough Council “for a public work”. On the City Council’s approach the Urban Fire Authority was the first public body to acquire the land for a public work, making the Borough Council the person from whom the land was acquired. As the successor to the Borough Council, the City Council submits that it is entitled to the benefit of the offer-back provisions of the 1981 Act.
[48] The position of the Commission, reduced to summary form, is set out at paragraph 6 of its written submissions:

Because the [Borough Council] bought the Land for a public work the Westerns or their successors, as the immediately prior owner are entitled to the benefit of section 40 of the Public Works Act 1981 (in the event the appeal is not upheld).

The approach of Robertson J

[49] Robertson J considered that he was bound by the decision of this Court in Port Gisborne Ltd v Smiler [1999] 2 NZLR 695. He referred particularly to what this Court said at [39]-[40]:

[39] If the contrary view is taken that s 40 applies to land currently held for a public work even when its ownership was obtained by the holder without any contemplation of a public work purpose, the respondents still cannot succeed. Subsection (2) requires the land to be offered back to the person from whom it was acquired or to that person’s successor. On a literal interpretation this would require Port Gisborne to offer to sell the land to the Crown. Mr Williams’ only answer to this was to rely on Auckland Regional Council v Attorney-General. We agree that in appropriate circumstances there is justification for disregarding intervening public owners so as to give effect to the intent of the legislation and return the land to its original private owners. As Laurenson J said, that depends on the factual and legal nexus surrounding the acquisition of the land and the manner of its holding by the intermediate public owner. In Auckland Regional Council v Attorney-General Gault J commented at p 10:

“A construction excluding [as offerees] former owners that held the land for a public work would seem consistent with the intention of the section of providing a prior right to a private person to reacquire land taken or acquired from him for public use.”

[40] Where land has continued to be held by successive public bodies for a public work throughout, the true intent and spirit of s 40 is that the land should be returned to the original owner. The intent of the section cannot, however, extend to bypassing an intervening public owner where that owner neither acquired nor held the land for a public work. In the situation that the land was held throughout for a public work, there is merely a preservation of rights that the original owner would have enjoyed under s 40 had there not been a change of public owner. Where, however, the land was acquired and held by the first public owner for something other than a public work, there are no rights to preserve and it is not possible, given the wording of subs (2), to find that those rights accrue when ownership changes.

[50] The Judge also referred to the followed passage from the judgment of Goddard J in Te Runanaga O Ngati Awa v Attorney-General [2004] 2 NZLR 252 at [129]:

[T]he spirit and intent of s 40 seems more appropriately directed to the restoration of land that has been compulsorily acquired from a private owner for a public work (as, for example, in Bowler Investments Ltd v Attorney-General [1987] NZHC 333; (1987) 7 NZAR 73; Attorney–General v Horton; Attorney–General v Hull [2000] 3 NZLR 63; and Deane v Attorney–General [1997] 2 NZLR 180), than it does to the restoration of land from one public entity (Defence) to another (the second defendant).

[51] Robertson J then went on:

[48] On a strictly literal interpretation of s 40, the land must be offered back to the successor of the Papatoetoe District Urban Fire authority - the Manukau City Council.

[49] In support of this literal interpretation is the fact that, in other Acts, Parliament has seen fit to deem that the transfer from the Crown to another legal entity has no effect for the purposes of s 40. For instance, s 30(2) of the Crown Research Institutes Act 1992 provides that:

“Nothing in sections 40 to 42 of the Public Works Act 1981 shall apply to the transfer of land or an interest in land to a Crown Research Institute (being a transfer to which this section applies) so long as the land or interest in land continues to be used for the purposes of a Crown Research Institute.”

[50] The Fire Services Commission has not been so dealt with.

[51] The passages noted from Smiler indicate that a purposive approach should be taken and transfers from one legal entity to another while the land is being used for public works should be ignored.

[52] The plaintiff's argument was that the initial transaction between the Papatoetoe Borough Council and the Westerns had simply been an acquiring of land for general purposes. Only once it was acquired was it subsequently decided that it should be available for the fire station which was a public work.

[53] With respect to Mr Frogley, that ignores the reality of the historical chronology. From the very first reference to the issue of purchasing the Fire Station Land the Papatoetoe Borough Council was cognisant of its responsibility to do something about a fire station site. It is clear that, in the acquisition of the land from the Westerns, the construction of a fire station was always a substantial and pivotal part of the transactions and associated negotiations.

[54] In my judgment it is unrealistic to suggest that if a fire station was or is a public work, the initial acquisition of the land by a public body, namely the Papatoetoe Borough Council, was not for that specific purpose.

[55] I am unable to see a basis to distinguish the clear and unambiguous Court of Appeal authority. As I am bound by it I must conclude that the provisions of s40 should be applied to the Western transaction.

Evaluation

[52] We agree with Robertson J that the case is controlled by authority and in particular what this Court said in the Port Gisborne case at [40] (see [49] above).
[53] Applying that principle to the present case, Robertson J’s conclusion is plainly correct. The Borough Council purchased the land for the purposes of a fire station being constructed on it. Accordingly, it cannot be said that the Borough Council, as the first public owner, “neither acquired nor held the land for a public work.”

The Commission’s appeal on costs

[54] Robertson J concluded his judgment by making no order for costs. He did not articulate his reasons for this conclusion but they might be thought to be self-evident. This was litigation between two public bodies. Neither can fairly be regarded as having succeeded. The City Council’s attempt to enforce s 40 failed. But so too did the Commissions attempt to avoid the operation of s 40. Presumably it is a matter of indifference to the Commission whether the required offer-back is to the City Council or the Westerns’ successors.
[55] We see no merit in the challenge to the order.
[56] However, as we have now found in favour of the Commission, it should be entitled to costs in the High Court. We therefore award the costs in the High Court proceedings on a 2B basis. We make no ruling on costs in relation to the caveat proceeding: that is a matter which should be determined in the High Court.

Result

[57] We allow the appeal.

Costs in this Court

[58] As the Commission has been successful in this Court, we award it costs of $6,000 plus usual disbursements.

Solicitors:
Chapman Tripp, Wellington for Appellant
Brookfields, Auckland for Respondent